Primo Water Reports Second Quarter Results

Primo Water Corporation has announced its financial results for the second quarter ended June 30, 2013. The company reported that total net sales decreased 3.2% to $23.8 million compared to $24.6 million for the second quarter of 2012 due to the timing of dispenser shipments to retailers, it noted. The change in net sales resulted from a $1.6 million decrease in dispenser sales partially offset by a $0.8 million increase in water sales.

Water segment net sales increased 5.5% to $16.2 million for the second quarter compared to $15.4 million in the second quarter of 2012. Sales in the water segment consist of sales of multi-gallon purified bottled water (“Exchange”) and self-serve filtered drinking water vending services (“Refill”). The increase in water net sales was primarily due to an 8.6% increase in Exchange sales driven by same-store unit growth of 10.6% for the company’s U.S. exchange services compared to the second quarter of 2012. Refill sales also improved 1.8% driven by an increase in refill locations and improved sales of empty bottles versus the prior year period.

Dispenser segment net sales for the second quarter of 2013 decreased 17.6% to $7.6 million compared to $9.2 million in the second quarter of 2012. The anticipated decrease was due to additional sales in the second quarter of 2012 related to the rollout of new locations for a major retailer. Despite the 18% decline in dispenser unit sell-in to retailers, the company reported its 14th consecutive quarter of growth in consumer purchases as dispenser unit sales to consumers increased 19.9% for the second quarter of 2013 compared to the same period in the prior year.

Adjusted EBITDA increased 77.9% to $2.3 million from $1.3 million in the second quarter of 2012. Net loss from continuing operations for the second quarter of 2013 was $2.1 million compared to $13.6 million for the second quarter of the prior year. Net loss from continuing operations for the second quarter of 2012 was impacted by a non-cash goodwill impairment charge of $11.5 million for the water segment and an income tax benefit of $1.5 million.

“We are pleased with our ability to improve our second quarter operating results as we benefited from higher water segment sales and increased margins versus the prior year,” said Billy Prim, Primo Water’s CEO. “We generated another quarter of strong U.S. Exchange same store sales growth driven by accelerated growth in consumer demand for our innovative water dispensers. This combined with leverage of our cost structure helped us increase our cash flow generation and, going forward, we are optimistic about continued improvements in our financial results for the remainder of 2013, which we expect will be driven by continued growth of our consumer base.”